A Nicaraguan committee approved a proposed route on Monday for a $40bn shipping channel across the Central American country that would compete with the Panama Canal.

The committee of government officials, businessmen and academics approved a 172 mile (278 km) route from the mouth of the Brito river on the Pacific side to the Punto Gorda river on the Caribbean that was proposed by executives from the HK Nicaragua Canal Development Investment Co Ltd (HKND Group).

The Hong Kong-based HKND group, which is leading the project, is headed by Chinese lawyer Wang Jing, who also heads Chinese company Xinwei Telecom Enterprise Group.

The proposed canal would pass through Lake Nicaragua, Central America's largest lake, and will be between 230 meters and 520 meters (755 feet to 1,706 feet) wide and 27.6 meters (90 feet) deep, said HKND engineer Dong Yunsong.